Ten homes on one pole-mounted transformer each carry a 6 kVA connected load, so 60 kVA of appliances hangs off that one unit. The transformer is a 25 kVA. Before you read on, decide whether that is undersized.
It is not. Nobody runs every appliance at once, and no two houses peak at the same minute. Two effects stack here. First, each home’s actual maximum demand is far below its 6 kVA of connected nameplate. Second, the ten individual peaks land at different times of day, so the group never sums to the arithmetic total. The transformer is sized to what the whole group draws at its worst shared moment, which is much smaller than 60 kVA.
Three ratios name these effects, and mixing them up is the single biggest source of confusion here, because each one points a different direction relative to 1. Demand factor is actual maximum demand divided by connected load; it is always less than 1, say 0.6 when a 6 kVA home peaks at 3.6 kVA. Diversity factor is the sum of each customer’s individual peak divided by the coincident group peak; it is always greater than 1, commonly near 2.0 on a residential group because the peaks do not line up. Coincidence factor is simply the reciprocal of the diversity factor, so it is always less than 1, here 0.5.
Run the hook through them. Ten homes at 3.6 kVA individual peak sum to 36 kVA. Divide by a diversity factor of 2.0 and the coincident peak is 18 kVA. The transformer is sized to that 18 kVA coincident peak, not the 36 kVA sum and certainly not the 60 kVA connected load, which is why a 25 kVA unit is correct and a 60 kVA one would be wasted iron.
For a buyer specifying a transformer, a planner sizing a feeder, or an operator reading a loading report, the lesson is the same: connected load is the ceiling nobody hits, and the coincident peak is the number that sizes the equipment. Never size to the sum of nameplate loads; size to the coincident peak the diversity factor gives you. Get the three ratios and their directions straight and you stop buying capacity for a moment that never arrives.
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